2016 OSAP Default Rates and Repayment Assistance Usage Rates

Why this Information is Important

To help students assess the financial risk and learn about prior student loan borrower outcomes, the Ministry of Advanced Education and Skills Development collects and publishes the following indicators by institution and program for Canada-Ontario Integrated Student Loan (COISL) recipients:

Prior Years OSAP Default Rate Details

2016 OSAP Repayment Assistance Plan Usage Rates

What is the Repayment Assistance Plan (RAP)?

The Repayment Assistance Plan (RAP) provides help to borrowers having difficulty repaying their student loans. If their RAP application is approved, either no payment is required, or the borrower qualifies for a reduced payment for 6 months.

The borrower’s family income (borrower, and spouse if applicable), family size and amount of student loan debt are used to determine eligibility.

One term of RAP is for 6 months. The borrower can re-apply for RAP at the end of the 6 month term.

Initiatives to Reduce Loan Defaults

Institution Accountabilities

Postsecondary institutions have an important role to play in reducing loan defaults. Some measures schools have implemented include:

improving program quality and relevance

ensuring adequate testing and admissions practices

informing students of loan repayment and repayment assistance

providing support to students to complete their studies

assisting with job searches

In addition, OSAP approved private institutions in Ontario must achieve:

Both an overall graduation rate and an overall graduate employment rate of at least 80% of the overall average rate for Ontario Public Colleges in at least one of every three years.

An overall default rate that is at or below the default rate threshold in at least one of every four years. The first year of default rates included in this standard are the 2016 default rates of 2013-14 borrowers.

Sharing the Cost of Loan Defaults

An institution is responsible for sharing the costs of loan default if their default rate is above a defined percentage of the provincial average default rate.

For loans issued in the 2013-14 academic year, any institutions with a 2016 loan default rate over 25% are responsible for sharing the loan default costs.

Reporting Program Outcomes

To help students make an informed decision on their studies, the following information on an institution’s programs must be posted on their website:

Other Loan Default Mitigation Initiatives

Credit Screening

Students aged 22 and older who have been in arrears for 90 days or more on three or more personal loans or credit accounts in the past three years, each with a value of $1,000 or more, are ineligible for student loans.

Income Verification

The ministry verifies income information that students, and their parent(s) or spouse provides (if applicable) to OSAP with Canada Revenue Agency.

Closing the Bankruptcy Loophole

Federal legislation exempts federal and provincial student loans from being included in bankruptcy proceedings for a 7-year period following students’ completion of their studies.

Collections

The province recovers monies owed on student loans through contracted private collection agencies and set-offs against income tax refunds.